Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
consider moving your money from the housing market to financial markets or gold due to high mortgage rates and tough guidelines. Home prices may need to drop significantly before things stabilize. Seeking advice from a financial advisor who understands the market could be helpful in making the right decisions.
When ‘Carol Vivian Constable’ is trading, there's no nonsense and no excuses. She wins the trade and you win. Take the loss, I promise she'll take one with you.
Meanwhile in california house prices keep going up and the fed keeps talking about lowering rates... tell me more about how the prices are coming down.
Real estate is localized , I live in norwalk & Cerritos ca . Per rockethomes norwalk had 85% of homes sell within 30 days , Cerritos around 75% . Norwalk having 83% of homes selling over asking
😂😂😂😂😂😂😂 $50k off is nothing.. We are going to see a 30-40% price drop kind of like in 2007... Real estate agents won't tell you that because it hurts their business... The Fed is not going to lower Rates anytime soon because of the massive inflation... Inflation is destroying the US economy so lowering rates will cause hyperinflation...
6:08 Not even close. Try $250k. With $250k your semi monthly NET take home (after California and federal taxes) is $6,624. That will get you to your $13,000 a month. And that's using 50% of your income on your mortgage. If we go off of your $200k, your semi monthly take home is only $5,476 which would be around $11,000 a month only. $2,000 short of your $13,000 a month. (Note: we obviously don't care about gross pay because we need to realistically calculate how much money we actually have to spend on the mortgage after taxes are taken out).
It is probably delusional, but the prices really need to drop at least 30% to make a difference for people in my opinion. My wife and I are 30 and are in the top 20% of household income and should be in the top 10% in just a couple of years, and the idea of affording a home where I grew up my whole life is laughable. Everyone I know is in the same situation, including my dentist, it really makes no sense out there right now in California and the entire country. I will say I do feel like your insight into lowering rates is correct, its counter intuitive on the surface but the entire market is like the 405 at rush hour. Also, all these "buyers" everyone talks about waiting to pounce, yet most people are flat fucking broke struggling to keep up with the insane inflation.
When the prices don't make sense... don't try to make sense of it. Follow your brain lol they have to come down. I am seeing people with 100k household ince buying houses with $4,500 monthly payments...it's not sustainable. Taxes, Utililities, insurance, car payments, food, etc.
It depends in the area. My GF just sold one of rentals in Orange County, on the market for 7 days, she had gotten 6 offers as she priced it realistically.
Even the most conservative estimates say we are vastly under- housed. And CA has ownership at about 52% of the people. Whereas the nation is about 64%.
I don't care if mortgage rates drop to 1%, who's got $200K laying around for the down payment? Unless you already own a home with equity, you're not likely to have the down payment for anything in SoCal!
It’s true that as mortgage rates decrease, those homeowners with very low interest rates that want to sell, but can’t under current interest rate climate will result in a ton of new inventory putting pressure on housing prices when rates drop . However it’s highly unlikely that those homeowners will simply sell their home and just rent, most will likely buy new homes which will ultimately stabilize prices
@@TheBritishBlokeRealtor we have already seen the highest out-migration from California during Covid when conditions were ripe (low interest rates, remote work, and super cheap housing in places like Texas, Florida, Nevada, Arizona, and Colorado) and prices have gone up if not stabilized in most of California (excluding SF/Bay area). It’s hard to find those same cheap deals now that housing prices have gone up tremendously in those areas. There have been some housing price reductions in those areas, but not enough where I would expect people to leave in such large numbers to impact the housing market in California.
Yes, I need someone to explain this to me like I’m stupid because weren’t prices reaching record highs when rates were low? Even higher now, so idk how much rates are effecting prices - they just seem to be climbing with no end in sight. Even if there is more inventory, most still can’t afford to buy so those who already know how to control and gain assets will benefit from the correction.
@@Imjusttryingtotellufor someone can’t afford a place in market like Los Angeles today, it’s likely they still can’t afford anything when rates drop. The bottom line is the supply will not improve because we are running out of place to build.
@@jiaweizhang5145 yes that’s how South Florida is, there some land available but it’s very expensive - that alone will keep the Miami market healthy even though it seems inflated to locals.
Bad idea. The worst recession in 100 years just started . Who can afford a $6,500 a month house payment with a $200,000 house payment? Don't FOMO . WAIT.
Many of the price drops being reported is not because of a lack of willing buyers, but because no one smart will start a new mortgage now when we know that rates are likely to drop soon (and many have been waiting all year with promises of rate cuts). Also, houses are unaffordable for most here in LA but that’s really only true for new home buyers trying to get into the market. Many of those looking to buy however are existing homeowners with equity in their homes that will be used as a sizeable down payment, but need reasonable rates for the move to make sense. I don’t expect housing prices to drop in So Cal based solely on housing prices.
Why does interest coming down make sellers want to sell more? Just to move to a different house? If so, can I know why you think that increase in supply will be greater than increase in demand?
people looking to move out of state or downsize. There are many reasons people want to move and as we saw in 2021 when rates come down people move. Affordability will still be high if rates drop 1% and many sellers in So Cal are leaving the State and not repurchasing in CA so when more homes hit the market the demand won't be there leading to more choice for buyers and probably leading to the home prices to fall.
If interest rate only drop 1%, downsize may not save their money with most sit at 2-3% today. And if they do buy, the demand and supply would be a wash. So you are predicting the supply will go up because people are moving out of CA - don’t forget we also have people coming in. The net population is not decreasing
If you need 2 incomes to buy a home, and 1 income just to pay mortgage, you got almost 2x chance of losing that home because both spouses need to hold on to their jobs.
1.) Interest rates will only come down if we are in a recession. Interest rates do not decline if the economy is expanding or stagnant. 2.) Latest data shows California and the SoCal metro area has one of the highest unemployment rates in the U.S. 3.) The Federal Reserve has studied over 50 housing bubbles across the world. It takes about 3 to 8 years from peak home prices until home prices bottom out. This implies home prices in SoCal will not bottom out until somewhere between the years 2027 to 2032 4.) Home prices historically will only decline during recessions with job losses.
The market crash is in the pocket of the middleman that rely on volume. Time on market ≠ Sales Price. List price ≠ Sales Price. The only way you think home prices will drop is if you think inflation will go away. Pull up M2 vs CaseShiller20 or similar and stop overthinking it. Middleman myths that rely on volume do not affect price. Affordability has nothing to do with prices. Real estate tracks inflation. It’s really that simple.
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Back in the day, when I purchased my first home to live-in; that was Miami in the early 1990s, first mortgages with rates of 8 to 9% and 9% to 10% were typical. People will have to accept the possibility that we won't ever return to 3%. If sellers must sell, home prices will have to decline, and lower evaluations will follow. Pretty sure I'm not alone in my chain of thoughts.
If anything, it'll get worse. Very soon, affordable housing will no longer be affordable. So anything anyone want to do, I will advise they do it now because the prices today will look like dips tomorrow. Until the Fed clamps down even further, I think we're going to see hysteria due to rampant inflation. You can't halfway rip the band-aid off.
consider moving your money from the housing market to financial markets or gold due to high mortgage rates and tough guidelines. Home prices may need to drop significantly before things stabilize. Seeking advice from a financial advisor who understands the market could be helpful in making the right decisions.
I will be happy getting assistance and glad to get the help of one, but just how can one spot a reputable one?
When ‘Carol Vivian Constable’ is trading, there's no nonsense and no excuses. She wins the trade and you win. Take the loss, I promise she'll take one with you.
She appears to be well-educated and well-read. I ran an online search on her name and came across her website; thank you for sharing.
Meanwhile in california house prices keep going up and the fed keeps talking about lowering rates... tell me more about how the prices are coming down.
Simple, your not seeing the reality, thank the Gov.
House prices in southern California are going up yearly with no signs of slowing down. Demand is growing and supply is very short.
no signs of slowing down?
Real estate is localized , I live in norwalk & Cerritos ca . Per rockethomes norwalk had 85% of homes sell within 30 days , Cerritos around 75% . Norwalk having 83% of homes selling over asking
I missed the part where the So Cal market burst
I am from LA, 50k off a 1-million-dollar home makes no difference. Leave or rent for the rest of one's life.
😂😂😂😂😂😂😂 $50k off is nothing.. We are going to see a 30-40% price drop kind of like in 2007... Real estate agents won't tell you that because it hurts their business... The Fed is not going to lower Rates anytime soon because of the massive inflation... Inflation is destroying the US economy so lowering rates will cause hyperinflation...
Hmmmm, no discussion of corporations buying houses... they usually don't worry about interest and are able to rent at exorbitant rates.
6:08 Not even close. Try $250k. With $250k your semi monthly NET take home (after California and federal taxes) is $6,624. That will get you to your $13,000 a month. And that's using 50% of your income on your mortgage. If we go off of your $200k, your semi monthly take home is only $5,476 which would be around $11,000 a month only. $2,000 short of your $13,000 a month. (Note: we obviously don't care about gross pay because we need to realistically calculate how much money we actually have to spend on the mortgage after taxes are taken out).
meaning they are over priced oops. never buy always build ignore the market.
Not to mention doubling of home insurance. Your insurance call is way understated Insurance companies bailing on California
Yes that’s very true
Worst case for SoCal is a flatline
It is probably delusional, but the prices really need to drop at least 30% to make a difference for people in my opinion. My wife and I are 30 and are in the top 20% of household income and should be in the top 10% in just a couple of years, and the idea of affording a home where I grew up my whole life is laughable.
Everyone I know is in the same situation, including my dentist, it really makes no sense out there right now in California and the entire country. I will say I do feel like your insight into lowering rates is correct, its counter intuitive on the surface but the entire market is like the 405 at rush hour. Also, all these "buyers" everyone talks about waiting to pounce, yet most people are flat fucking broke struggling to keep up with the insane inflation.
When the prices don't make sense... don't try to make sense of it. Follow your brain lol they have to come down. I am seeing people with 100k household ince buying houses with $4,500 monthly payments...it's not sustainable. Taxes, Utililities, insurance, car payments, food, etc.
It depends in the area. My GF just sold one of rentals in Orange County, on the market for 7 days, she had gotten 6 offers as she priced it realistically.
Thank you for your updated.
you're welcome
Even the most conservative estimates say we are vastly under- housed. And CA has ownership at about 52% of the people. Whereas the nation is about 64%.
I don't care if mortgage rates drop to 1%, who's got $200K laying around for the down payment? Unless you already own a home with equity, you're not likely to have the down payment for anything in SoCal!
You only need 3.5 or 5 percent for a down payment depending if you do FHA or Conventional.
It’s true that as mortgage rates decrease, those homeowners with very low interest rates that want to sell, but can’t under current interest rate climate will result in a ton of new inventory putting pressure on housing prices when rates drop . However it’s highly unlikely that those homeowners will simply sell their home and just rent, most will likely buy new homes which will ultimately stabilize prices
true but a great deal of the sellers are moving out of state so not buying again in CA
@@TheBritishBlokeRealtor we have already seen the highest out-migration from California during Covid when conditions were ripe (low interest rates, remote work, and super cheap housing in places like Texas, Florida, Nevada, Arizona, and Colorado) and prices have gone up if not stabilized in most of California (excluding SF/Bay area). It’s hard to find those same cheap deals now that housing prices have gone up tremendously in those areas. There have been some housing price reductions in those areas, but not enough where I would expect people to leave in such large numbers to impact the housing market in California.
If interest lowers more buyers and further price increases due to limited supply. It’s a lose lose situation either way for buyers.
Exactly! And most of the sellers still have to find a new place to live. Texas can take all of them
Yes, I need someone to explain this to me like I’m stupid because weren’t prices reaching record highs when rates were low?
Even higher now, so idk how much rates are effecting prices - they just seem to be climbing with no end in sight.
Even if there is more inventory, most still can’t afford to buy so those who already know how to control and gain assets will benefit from the correction.
@@Imjusttryingtotellufor someone can’t afford a place in market like Los Angeles today, it’s likely they still can’t afford anything when rates drop. The bottom line is the supply will not improve because we are running out of place to build.
@@jiaweizhang5145 yes that’s how South Florida is, there some land available but it’s very expensive - that alone will keep the Miami market healthy even though it seems inflated to locals.
good info i guess ill wait to buy my new home.
Heard the interest rates will drop in a few months
maybe a very little but wont be below 6% for at least 6 to 9 months.
problem is when interests rates drop all the buyers will come out in droves and create bidding wars. probably just best to buy now
Bad idea. The worst recession in 100 years just started . Who can afford a $6,500 a month house payment with a $200,000 house payment? Don't FOMO . WAIT.
Many of the price drops being reported is not because of a lack of willing buyers, but because no one smart will start a new mortgage now when we know that rates are likely to drop soon (and many have been waiting all year with promises of rate cuts).
Also, houses are unaffordable for most here in LA but that’s really only true for new home buyers trying to get into the market. Many of those looking to buy however are existing homeowners with equity in their homes that will be used as a sizeable down payment, but need reasonable rates for the move to make sense. I don’t expect housing prices to drop in So Cal based solely on housing prices.
Not in this part of a cycle…rising rates locked away inventory and lowering rates will unlock that inventory.
CA real estate market is a joke ; not worth it at all
Mortgage rates can be 2% still don’t care as I don’t want to spend 1 mill or more on a home when it’s not worth it…
I might need a third job to make it 😆
$230k/yr is only ~$13k/mo after tax 💀
Thank God! Lol 😁🏡
If we had affordable housing the prices of homes would drop. Great for buyers and bad for homeowners and investors.
History will repeat. The housing market in 2024 is similar to that of 2007. Buyers should wait until 2029 to start looking.
Why does interest coming down make sellers want to sell more? Just to move to a different house? If so, can I know why you think that increase in supply will be greater than increase in demand?
people looking to move out of state or downsize. There are many reasons people want to move and as we saw in 2021 when rates come down people move. Affordability will still be high if rates drop 1% and many sellers in So Cal are leaving the State and not repurchasing in CA so when more homes hit the market the demand won't be there leading to more choice for buyers and probably leading to the home prices to fall.
If interest rate only drop 1%, downsize may not save their money with most sit at 2-3% today. And if they do buy, the demand and supply would be a wash. So you are predicting the supply will go up because people are moving out of CA - don’t forget we also have people coming in. The net population is not decreasing
Why you asking when you said it just crashed?
I said burst not crash. Big difference
If you need 2 incomes to buy a home, and 1 income just to pay mortgage, you got almost 2x chance of losing that home because both spouses need to hold on to their jobs.
agreed
no you have to know people to own now.
The price of everything will keep going up!
Our money is becoming worthless.
Long Term home prices will always go up but short term they can drop and I think we will see that in the next 12 months. We are already seeing it.
12k mortgages, good luck. Don’t forget the new tax assessment for next year. Many will wake to shock.
What new assessment?
1.) Interest rates will only come down if we are in a recession. Interest rates do not decline if the economy is expanding or stagnant.
2.) Latest data shows California and the SoCal metro area has one of the highest unemployment rates in the U.S.
3.) The Federal Reserve has studied over 50 housing bubbles across the world. It takes about 3 to 8 years from peak home prices until home prices bottom out. This implies home prices in SoCal will not bottom out until somewhere between the years 2027 to 2032
4.) Home prices historically will only decline during recessions with job losses.
nonsense talk. it will slow but it will still go up for years to come.
The market crash is in the pocket of the middleman that rely on volume. Time on market ≠ Sales Price. List price ≠ Sales Price. The only way you think home prices will drop is if you think inflation will go away. Pull up M2 vs CaseShiller20 or similar and stop overthinking it. Middleman myths that rely on volume do not affect price. Affordability has nothing to do with prices. Real estate tracks inflation. It’s really that simple.